I should have added some other points to the previous post.
1) With the upgraded mill and grinding capacity what was once low grade slop will become valuable if gold prices remain in the range of say $4,500 and above. VAU/KOTH is well placed to capitalize on other exploration prospects it has as well. It would be good to see the company drill out other exploration prospects it has at KOTH as outlined below
2) VAU had $318 million in losses at Dec 31 2024. I expect these to be used up before June 30 next year if not earlier. That will put VAU in a position to start paying out fully franked dividends in FY 2027. Assuming over $1 billion in cashflow, VAU could pay a fully franked dividend of 7 cents (10 cents pre tax). With 6.8 million shares on issue that would cost $680 million leaving 300 million left to invest in further capex and exploration.
With a dividend of 7 cents and a long-time frame of 10 years this should see VAU closer to $1.50.
3) If VAU can execute all of above especially the mill upgrade, I think they will end up on the radar of a larger gold miner. There aren't too many companies around in the mid tier space with such a long mine life and big mill. RMS has a lot of capex in front of it and WGX seem unable to control costs nor do they have really big mills capable of processing low grade ore that is becoming valuable over time.
GLTA/IMHO
VAU Price at posting:
45.0¢ Sentiment: Buy Disclosure: Held
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